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Less sick leave with better leadership

Helsinki (08.02.2012 - Heikki Jokinen) Company leadership has a major impact on the ability of employees to perform their work, according to a recent study made by the Finnish Institute of Occupational Health. Investing in good leadership could reduce accidents, the amount of sick leave and general inability to work.

The study is based on information collected from 64 Finnish companies, which together employ 80,000 people. The material covers the years from 2008 to 2011.

The cost of work not done in these companies was on average 7.1 per cent of the salaries paid, varying from 2 to 12 per cent depending on the company. The costs due to sick leave and other similar expenses were on average 2,900 euro annually per employee.

The total cost of work not done in the companies participating in the study may be estimated at between 50-230 million euro annually. If the entire private sector of the Finnish economy were to be measured in this way this would mean a direct cost of 4-5 billion euro for private companies. And the study reveals that the branch or the size of the company does not influence the cost level.

Twelve of the companies have been working determinedly at ways to improve leadership, by taking steps such as early intervention in working ability problems, paying more attention to rehabilitation and making it easier for employees to return to work after accidents and sick leave.

Whereas the costs of the work not done concerning the whole group have remained at the same level every year, among those 12 who have adopted special measures to improve work ability, the costs have been dropping by 27 per cent. In euros this saving would be approximately 1,000 euro annually per full time employee.

Even though investment in occupational health grew somewhat in these 12 companies, savings from the smaller number of sick leave days, accident costs and early pensions were considerably more.

The food industry company Atria is one of the companies participating in the study. They succeeded in reducing sick leave from ten per cent of working time to six per cent by investing in occupational health services and better leadership.

The company gave their employees the possibility to monitor their health even before possible illness arose, rehabilitation began in the early stages and for those for whom the work had become too heavy or arduous, an alternative was offered.

Work-related accidents diminished by 30-40 per cent and extended periods of sick leave were cut in half. The company competitiveness, effectiveness and economy improved, too, report the company management.